16 lithium-battery and smart-meter stocks to watch

Commentary: Politics big caveat when it comes to green energy

SAN LUIS OBISPO, Calif. (MarketWatch) — Green-energy stocks, renewables, alternative energy, clean tech — call this niche sector whatever you want but you are guaranteed to find a treasure trove of undervalued gems here in America and across the world.

Why? Very simple: Billions more people are being born every day.

And all this growth means lots more Pampers, more Big Macs, more Ford Fusions and more growth in everything that supports them. And more new technologies and innovative new solutions that create the emerging opportunities. And more entrepreneurs willing to put up risk capital, make the future happen and offer investors new ways to make money.

And that’s why when I saw Wired magazine’s challenging feature, “The Clean Tech Meltdown,” I knew there had to be stocks that not only weren’t melting down but also were great opportunities for the right kind of investors, traders, speculators.

And sure enough, we uncovered some great leads. Wired is one of America’s best sources for ideas on the future for technology, and Rachel Swaby proved it again with her “Power Struggles” sidebar about eight areas in this “green tech” sector. A couple days ago we uncovered 19 in the first four areas, now here are 16 more opportunities:

Hybrid batteries: Buy lithium now, before demand in batteries

Lithium means zero-emission vehicles, with huge global growth predicted. Right after Wall Street’s de facto bankruptcy in 2008 the federal government injected $2.4 billion into the battery industry from the American Recovery and Reinvestment Act.

Our new national policy to business was crystal clear: Get “more electric cars on the road.” And after just a few years we got hybrids like the Chevy Volt, Ford delivery vans and “every major auto manufacturer is now either producing an all-electric car or has one on its drawing board,” as Wired points out.

The challenge, as Wired puts it: “Advanced lithium-ion batteries still cost about $650 per kilowatt-hour of usable energy. At that level, the 24-kWh battery pack for a Nissan Leaf costs more than some cars.”

So, yes, the cost of materials is slowing progress, too slow for impatient investors who forget the auto industry nearly disappeared completely just four years ago. As Wired’s Swaby says, “despite a White House call to get battery prices down to $100 per kWh by 2020, the rosiest predictions foresee nothing cheaper than $300 per kWh over the next decade.”

But that’s not stopping savvy investors from uncovering the opportunities. Check out Seeking Alpha’s upbeat Retire Fund piece, “Invest in Lithium Before the Battery Rush.” Remember, it’s not just hybrids and electric-car battery sales driving demand. Yes, sales are projected to increase five-times by 2020. But supply just can’t keep up, and cost per ton’s up 20%.

Why? As with any production, it “takes technical expertise, engineering, good science, and investment to produce battery-grade lithium.”

Retire Fund discusses several Lithium suppliers: “Some of the large suppliers, like SQM
SQM, -0.59%
, Chematell and FMC
FMC, -0.35%
still sell their lithium on the spot market,” and “because they are brine producers, which basically produce their lithium carbonate as a byproduct of their larger potash operations,” which creates an uneven flow of lithium.

For that see “Talison Lithium
TLTHF
of Australia, which is the largest pure lithium producer in the world now” and last year expanded operations by acquiring the Salares 7 project in Chile’s Atacama Desert. And for direct investments in battery manufacturers, check out HybridCars for discussions of Matsushita, Sanyo, EnerDel and Electro Energy .

Smart meters: “Making national power grid smarter, more efficient, stable

The big push nationally: “Build more efficiency and stability” into America’s power grid by replacing old “analog meters with digital devices that provide real-time feedback to both customers and utilities.” Across America utility companies are jumping on the bandwagon because “smart meters are the linchpin of the smart grid — computer-based automation of electricity delivery.”

Yes, there is resistance, just as with any major change. Some “fringe groups have voiced concerns about privacy and health.” Also some not-so-fringe companies: The “FBI has warned that smart-grid hacking is losing energy companies millions every year.”

All these concerns have “slowed or canceled rollouts in several communities.” In addition, faulty meters that “led to higher bills have caused several local governments to require independent reviews of the systems.”

But the good news is that “none of these early glitches are likely to get in the way for long. In fact, analysts predict 250 million smart meters will be installed worldwide by 2015.” And at an estimated $300 each, that’s $75 billion. A

In addition, GreenWorldInvestor puts the spotlight on this sector as an M&A and buyout target: “The smart-meter industry like the rest of the smart-grid industry is seeing an astounding pace of consolidation as big industrial conglomerates like Siemens
SI
, ABB
ABB, -0.37%
, Schneider Electric and others gobble up smaller companies at a rapid pace.” Obviously this consolidation trend opens opportunities for savvy traders and investors.

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